Hmm... to me, the third one was the best. But I suppose the first is the one that needs to be read, if one's only going to read one.

I question whether Rowling should be on the list at all, when The Last Unicorn is not.

This is true. And I'd like to see Hughart's The Bridge of Birds on the list. But I suppose for sheer impact in the wider world Rowling belongs there.